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12-07-2019, Manita, Section 263, 10(38), Tribunal Delhi

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3 months 16 hours ago - 3 months 16 hours ago #10059 by amit
Section - 263, 10(38)
Order Date - 12-07-2019
Favouring - Assessee
Court - Tribunal Delhi
Appellant - Manita
Respondent - PCIT
Justice - Bhavnesh Saini JM & Dr. B. R. R. Kumar AM
Citation - 719Taxpundit156
Appeal No. - ITA.No.3432/Del./2019
Asstt. Year - 2014-2015



This appeal by Assessee has been directed against the Order of the Ld. Pr. CIT, Muzaffarnagar, Dated 18.03.2019, under section 263 of the I.T. Act, 1961, for the A.Y. 2014-2015.

2. Brief facts of the case are that assessee is an individual and nature of business as shown in the assessment order is “Income from Long Term Capital Gains on Shares”. In this case, return of income was filed on 31.03.2005 showing income of Rs.5,25,960/-. The case was selected for scrutiny under CASS for reasons of suspicious long term capital gains on shares. Statutory notices were issued time to time. Assessee attended the proceedings before A.O. filed written submissions along with copy of computation of income, audit report, Trading & Profit & Loss Account & Balance-sheet. The A.O. noted that in response to the notice issued, assessee has furnished written submissions along with copy of Demat A/c, source of investment in shares, bank account, copy of share certificates, copy of account of Mathiyan Construction and same is taken on record. The A.O. after discussing the case with the Assessee’s Counsel, completed the assessment at returned income vide Order dated 22.12.2016 under section 143(3) of the I.T. Act, 1961.

3. The Ld. Pr. CIT on examination of the record found that A.O. has completed the assessment without examining the case properly. Therefore, notice under section 263 of the I.T. Act was issued on 29.01.2019 [PB-45] which is also reproduced in the impugned order in which it was stated that assessee has earned long term capital gains of Rs.70,90,508/- on sale of 4200 shares of M/s. Turbotech Engineering Ltd., in assessment year under appeal which is claimed exempt under section 10(38) of the I.T. Act. The A.O. failed to make enquiries from share broker, bank etc., and the Company for whom shares were purchased. The A.O. also did not make any enquiry with regard to investment of Rs 72,00,000/- with M/s. Mohit Ispat (P) Ltd., and A.O has also failed to examine the issue of incurring of Rs.10,78,472/- towards construction of home. Ld. Pr. CIT, therefore, found the assessment order to be erroneous and prejudicial to the interests of the Revenue.

The explanation of assessee was called for. The assessee filed detailed written submissions before Ld. Pr. CIT which is reproduced in the impugned order in which the assessee highlighted that detailed replies along with documentary evidences were filed before A.O. on the issues time to time which have been examined by the A.O. Therefore, there is no case of failure to make any enquiry at the assessment stage. The assessee relied upon several decisions in support of the contention. Ld. Pr. CIT, however, found that Order have been passed without making proper enquiry on the above issues despite case was selected for scrutiny. Hence, the case is covered by Clause (a) of Explanation-2 of Section 263(1) of the I.T. Act. Ld. Pr. CIT also noted that report of Investigation Wing were not utilised by the A.O. Further, A.O. did not make any enquiry on the issues stated in the notice. Therefore assessment order was set aside with a direction to the A.O. to pass assessment order afresh in accordance with the provisions of Law.

4. The assessee is in appeal challenging the impugned order under section 263 of the I.T. Act. Learned Counsel for the Assessee reiterated the submissions made before the Ld. Pr. CIT. Learned Counsel for the Assessee submitted that all the three issues on which proposed action under section 263 have been taken, all these issues have been duly examined by the A.O. and assessment order have been rightly made. The assessee has given details of sale and purchases in the return of income on the issue of capital gains earned on sale of shares. The A.O. issued questionnaire on the issue which is duly replied by assessee supported by bank statements and other materials. The assessee also filed details and evidences, sale and purchase of shares, supported by copy of the receipt for purchase of shares, copy of account in the books of the broker through whom the sales were made, copy of contract note and certificate of the broker The assessee also filed reply supported by cash flow statement and cash book to prove source of construction, copy of the Demat account was also filed along with copy of account in Mathiyan Construction in which the assessee is a partner to prove the source of purchases on shares. In the cash flow and cash book of the entries of investment with M/s. Mohit Ispat (P) Ltd., and amount incurred towards construction have been explained. The assessee also filed copy of the share certificates, bank

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Last edit: 3 months 16 hours ago by amit.

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